Chastened by the overwhelming evidence that austerity has done wonderful things for the British economy in spite of its own hemming-and-hawing on the matter, the IMF has a new policy: Austerity for everyone, even if there’s no evidence you need it.
In its latest assessment of Asia’s economic prospects, the International Monetary Fund tells the fast-growth economies of Asia that now is the time to start paring deficits, raising and broadening taxes and saving money for a rainy day.
The IMF notes that governments in Asia have been spending more than they used to, even though most economies in the region are at full capacity with plenty of jobs and little excess capacity. In IMF-wonk speak, the report tells Asia’s policy makers it’s time for “rebuilding fiscal space.”
IMF Calls for Preemptive Austerity in Asia [WSJ Real Time Economics]